The Catalyst For Overdue Price Reductions
It’s Friday desk clearing time for this blogger. “Khaki is turning the Moore County real estate market red-hot right now. Buyers who can tap into the home-loan program offered by the U.S. Department of Veterans Affairs are fueling a construction and buying binge the likes of which have never been seen. What is happening in this area is right on trend with what is going on nationally. Last year, the VA loan program guaranteed 707,107 home mortgages — setting a new all-time high — representing a 12 percent uptick from the previous year. Significantly, last year’s volume was nearly double the number of home mortgages the agency handled five years ago, and is nearly four times the volume from a decade ago. VA loans are so attractive that many military families end up owning multiple homes, said Angie Medlin, a mortgage specialist with New Penn Financial. ‘I’ve always done a lot of VA loans but I have seen an explosion in Moore,’ said Medlinl.”
“‘The VA offers the best rate out there. If you qualify for it, you can’t beat it,’ Medlin said. ‘In essence, they are encouraging them to purchase instead of rent. It is a great way to acquire property and they can purchase a home as an investment.’”
“Four consecutive years of rising home prices in Anchorage came to an end in 2016 as a weakened economy caused prices to stall out, according to the Multiple Listing Service. And what does the small decline in prices say about the market as a whole? ‘Certainly a decline of only a quarter-percent is not in itself any proof of a real estate calamity. But it very well could signal the beginning of a trend that promises better shopping opportunities in 2017 and beyond,’ said Niel Thomas, a realtor who provided the MLS data to Alaska Dispatch News.”
“Developer Mark Hunt’s $35 million acquisition of two downtown Aspen buildings has collapsed. Some tenants at the building once poised for demolition previously expressed concerns about the project at public hearings. One of them, Frank Heger, who has owned the Aspen Goldsmith jewelry and watch store for more than two decades, said he was relieved the transaction didn’t materialize. ‘If people keep tearing down these buildings and building new ones, at today’s costs of labor, who’s going to rent these places?’ he said. ‘You’re talking about $300 a square foot. Maybe if you’re selling reefer or heroin you can make it, but if you’re selling regular stuff, you won’t be able to make money.’”
“A coal mine in Grande Cache is bankrupt, delivering another setback to the town northwest of Edmonton that once relied heavily on the steelmaking coal producer as its economic engine. ‘We’ve seen some people move out of the community; housing prices have declined,’ said town councillor Yvonne Rempel, adding she expects the total value of real estate is sliding, putting a major dent in the town’s budget. ‘We also have some businesses closing.’”
“Home values in the Bayswater district fell 14 percent in the 12 months through January, the biggest drop in central London’s best neighborhoods, as sellers cut their asking prices in the wake of the Brexit vote. Values dropped by an average of 6.7 percent across the capital’s best districts as successive sales-tax increases damped demand, Knight Frank LLP said in a report. The Chelsea neighborhood saw a price drop of 13.3 percent, the second most among the districts Knight Frank defines as prime central London. Kensington was next with a drop of 11.9 percent.”
“More owners are accepting the need for discount to make up for the higher transaction costs that buyers face, narrowing the gap with what purchasers are willing to pay, Tom Bill, head of London residential research at Knight Frank, wrote in the report. ‘In some instances the EU referendum was the catalyst for overdue price reductions.’”
“While tenants in some parts of New Zealand scramble for housing, Christchurch is a tenant’s market, local property managers say. Ray White Shelleys Property Management director Shelley Scott said she had to teach several property owners about realistic weekly rents over the last year. Scott, a landlord herself, said there was an over-saturation of fully-furnished properties in particular. ‘In some cases I have had to reduce a couple of my furnished ones by $100 a week, which is quite a lot.’”
“The Central Bank yesterday said it remains vigilant over a possible creation of a construction bubble due to the runaway credit growth. Total private credit extended had reached an all-time high in 2016 exceeding Rs.750 billion. ‘The biggest, in terms of sectoral distribution of credit, is construction. That is something we’re looking into whether there’s a possibility of a bubble. We’re studying that very carefully,’ Central Bank Governor Dr. Indrajit Coomaraswamy said.”
“The real estate sector experts too have recently said that there is a real estate bubble in Colombo, which would remain until the apartment trend subsides and have blamed the government for warping prices by selling land in Colombo for high prices to foreign developers. There are some concerns that luxury apartments are not being sold, creating a glut in the market.”
“If solitude and silence are part of high living, then some Sentosa Cove residents are getting more than they bargained for. When The Sunday Times visited the Cove, many units of the private estates there were dark. At The Residences at W, a 228-unit development completed about five years ago, an online search shows 209 units are up for rent. Sentosa Cove had a poor 2016 - 15 out of the 21 resale transactions last year ended up in the red, with the 15 transactions making an average loss of $1.35 million, according to data from property portal SRX.”
“A unit at Sentosa Cove condo Turquoise went for $3.8 million last year. The seller had bought it at $7.16 million in 2007. Another apartment at Seascape was resold at $6.35 million last October. That owner had paid $11 million in 2011.”
“Mastering the art of riding a camel through the Gobi Desert while presenting a television show wasn’t exactly something Grace Brown imagined she would do in her lifetime. ‘My friends thought (moving to Mongolia) was crazy, but I’ve convinced a few to visit,’ the freelance video journalist said. Housing, though, is expensive. Brown said two-bedroom apartments with western-style finishes in downtown Ulaanbaatar were generally about $US2000 a month to rent, but supply far outstrips demand. ‘There are many luxury apartment blocks standing empty or half finished, while affordable apartments remain scant; you could say there’s a property bubble here.’”
“Beijing’s focus on deflating China’s asset bubbles and eliminating financial risks is hurting one of its key growth drivers, the property sector, analysts said. Property attracts nearly one fifth of China’s fixed-asset investment and directly contributed to 6.5 per cent of last year’s gross domestic product, and is seen as one of the key drivers of last year’s economic stabilisation. However, it could also become a victim of the central bank’s 10 basis-point increase in interbank money rates on Friday.”
“‘Mortgage rates face the risk of a large increase,’ Jiang Chao, the chief macro analyst at Shanghai-based Haitong Securities, wrote in a research report. ‘It, together with purchase restrictions in tier 1 and tier 2 cities, may lead to a continuous fall in property sales and a winter [for the] property market.’”
“Price chops in the city’s ultra-luxury market are showing no signs of slowing down. In total, 15 properties in the over-$10 million market saw a discount of more than 5 percent in the period between Jan. 31 and Feb 6, according to StreetEasy. The biggest reduction was at One Madison Park where a two-floor condominium had its asking price slashed by a whopping $5.5 million, or 17 percent.”
“151 East 58th Street, 47A: The owner of this One Beacon Court condo is Scott Kurnit. But if this recent discount is anything to go by, he may be keeping this 3,000-square-foot home. Kurnit put the pad up for sale last November with a $13.9 million asking price. Last week, $2 million, or 14 percent, was lopped off the asking price. The Vornado Realty Trust-developed building is also home to another notable price reduction. Billionaire hedge funder Steven Cohen has been trying to find a buyer for his apartment there since 2013. Its asking price has been dropped from $115 million down to $72 million over the years.”
‘In some instances the EU referendum was the catalyst for overdue price reductions.’
It’s always something. Currency exchange rates in Miami Beach. Oil here, coal there. What’s the excuse in Manhattan or Aspen? Prices are down more in those places than Houston.
Yes, it is always something. Sometimes events are in the human realm, and sometimes there are natural events. Occasionally, it’s just time for the BS to stop. Apts. for $300/sqft in Aspen pretty much speaks for itself. No amount of spinning and PR will stop the decline after the run up like that.
Aspen may be nice in the non-snow months, but people go there to ski. Also, America is trying to retire. Old people don’t engage in young people’s activities like skiing down a mountain side. I’m 60 years old, so no more skiing, climbing, and running. Gee, I miss being 30.
Regards,
Roidy
‘A coal mine in Grande Cache is bankrupt, delivering another setback to the town northwest of Edmonton that once relied heavily on the steelmaking coal producer as its economic engine. ‘We’ve seen some people move out of the community; housing prices have declined’
I drove through this place in 2001. Jeebus, house prices were high then.
people ignored the dead canary while feeding the squirrels
Nice turn of phrase, aquis.
‘Last year, the VA loan program guaranteed 707,107 home mortgages — setting a new all-time high — representing a 12 percent uptick from the previous year. Significantly, last year’s volume was nearly double the number of home mortgages the agency handled five years ago, and is nearly four times the volume from a decade ago. VA loans are so attractive that many military families end up owning multiple homes, said Angie Medlin’
I’d bet a good deal of these are zero down.
‘You Don’t Need Sky-High Income To Buy A Home’
‘Traditional “wisdom” states that you need to have a lot of money — and make a lot of money — to buy a home. That notion is fading.’
‘There are an abundance of low- and no-downpayment mortgage programs available in the market. Zero-down loans make up about 14% of today’s market, according to the Consumer Financial Protection Bureau.’
‘Down payment funds are optional when buying a home, but what about income? A recent report by the National Association of REALTORS® (NAR) answers that question. The NAR study shows that families can buy a home with as little as $33,000 in annual income. And, even that figure might be a high estimate.’
‘Even if you don’t make a lot of money, 2017 could be the year you buy a home.’
‘Rising Rents Convince Home Buyers To Look Into Low Income Home Loans’
‘Rents rose nearly 8% in 2016 in some locales, according to a recent ApartmentList.com study. Fortunately, renters still have a closing opportunity to lock in their home costs for the foreseeable future. Buying a home with a 30-year fixed rate — or even a 5-year adjustable rate mortgage — provides much more cost-of-living security than renting.’
‘For those on a tight budget, buying a home could be one of the smartest moves of their lives. Incomes aren’t rising as fast as rents are. Eventually, families are forced to move into smaller living spaces further away from employment. Landlords charge what the market will bear, and the market is telling them to raise their rates.’
‘This is reason enough for home buyers to look into low-income home loans as a solution to rising rent.’
I know someone who has a VA loan. 0% down 2.5% interest. He hated being in debt and asked me how to pay down the loan faster, faster, faster. I told him to do the 13th payment thing, but don’t pre-pay any more principle than that. His Tacoma is 13+ years old and he’s better off saving money for a replacement than to pay off the mortgage early.
Not to disrespect the veterans, but really, why are these programs allowed for multiple homes? ANY gov program, be it VA, or HAMP, MID, down payment assistance, etc. should be limited to primary residence.
The article is wrong. VA loans are only for owner occupied transactions. You only get one loan per vet, so if you move and don’t sell the old house, no new VA loan.
BTW, the VA loan program is fully self supporting, never costing taxpayers a nickle. They do get their cheap money with tax exempt bonds, which is one reason for the great interest rates.
Incorrect.
VA lending is riddled with holes the size of moon craters.
“For those on a tight budget, buying a home could be one of the smartest moves of their lives.”
Oh BROTHER; that statement is such a load of steaming horsecrap!!
purchase price is just the START of your expenses. go ahead & pencil-out the monthly average bills. g’head, Mr. Kotter.
all of the required utilities (that apts absorb) like water, waste, HOA fees, etc, PLUS just a FEW luxuries like cable or pool/lawn service easily puts you in the poorhouse for a min. of $2000 EXTRA a month. add in more for repairs, maint, etc. Of course this isnt news to most of us here.
its like watching all those TV home flipper shows years ago when the list of improvements/upgrades was lowballed so much I would literally fall off the couch in laughter!
(then it gels as you noticed all the ads for Home Depot. and where they shopped for supplies. the orange aprons. HA)
I have so much money left after “throwing money away on rent” every month that I don’t know where to throw it.
“VA loans are so attractive that many military families end up owning multiple homes, said Angie Medlin, a mortgage specialist with New Penn Financial.”
How is that possible Angie?
“VA borrowers are expressly forbidden from purchasing property with a VA home loan to be used as a “summer home” or “winter home”. The borrower must certify in a legally binding agreement that the home purchased with VA loan funds is to be used as the primary residence.”
http://www.vanewsblog.com/2012/08/va-loan-reader-questions-can-i-purchase-two-homes-with-an-va-loan/
‘to be used as the primary residence.’
I think that’s just for a year or two.
So, let’s say I’m based in xxxxx, xx, USA. I use a VA loan to buy my home. I then get deployed to xxxxx, Germany. I don’t sell my home because, I can rent the house to another military family and make the payments.
I stay in Germany for 4 years.
I now get moved back to the USA, this time in yyyyy, yy. I refinance my VA loan in xxxxx, xx (appreciation, principal paydown, etc.), keep renting that home to another military family, and now use a VA loan to buy a house in yyyyy, yy, USA.
My BIL is in the Army. He purchased a home in TX, then lived overseas, and now is back in a different state. He never sold the TX home, but now owns one also in the different state.
I suspect he used the pattern above.
Not possible according to another article by that author. They can only rent out a home using an IRRR loan, not a VA loan.
“But can a homeowner paying a VA mortgage rent the home out? Is this allowed under the terms of the VA home loan?
The short answer is no — but there are some options.
The reason a VA borrower isn’t allowed to rent out the property is because of the primary occupancy rule. VA loan rules require the borrower to certify they will use the property as their primary residence. No investment properties or summer homes may be purchased with a VA loan.
But there is an alternative to selling the property. A VA borrower is permitted to apply for an Interest Rate Reduction Refinancing Loan or IRRRL, which does not have the same occupancy requirements than a new purchase VA home loan.”
http://www.vanewsblog.com/2012/08/va-loan-reader-questions-can-i-purchase-two-homes-with-an-va-loan/
“There are an abundance of low- and no-down payment mortgage programs available in the market. Zero-down loans make up about 14% of today’s market, according to the Consumer Financial Protection Bureau.”
It’s time to exit the market when the RE professionals start pandering to the desperate and hard-put losers.
I will probably be moving to Moore County in a few months.
Rental apartments still reasonable but they are limited and I am a bit concerned about the availabiltiy of the couple I might be interested in. NO interest in buying a house.
‘Housing, though, is expensive. Brown said two-bedroom apartments with western-style finishes in downtown Ulaanbaatar were generally about $US2000 a month to rent, but supply far outstrips demand. ‘There are many luxury apartment blocks standing empty or half finished, while affordable apartments remain scant; you could say there’s a property bubble here.’
Here’s where some might say, “but the average Алтанцэцэг in downtown Ulaanbaatar isn’t seeing rent reductions!” Be patient. There is an imbalance, and it will work itself out.
http://www.collegerank.net/best-college-towns/
Best college towns.
It is exciting to think about going off to a new town or city, being on your own sort of, for the first time. But some say a college degree is over-rated. Have you thought about trade school? Plus, your home town probably isn’t that bad. Think of all the good times you had:
It’s a magical place…… with $90/hr wood butchers!
Lola, dont “butcher” the wood! Now I see the problem. No hacks get $90.
Hey kids, go get that MS in a STEM discipline, you will do well.
no pain, no gain.
ps. home town is #1
That’s the spirit! The world needs ditch-diggers too. There is no shame in hard work.
yes sir, someone has to clean up! Nothing wrong with that!
You make the bed you sleep in.
buh bye.
https://www.youtube.com/watch?v=YbTsebLs7yU
I have been saying this for about 4 years! Was a teacher briefly and learned about the programs in high school that prepare the kids for a trade - these kids can be making decent money out of high school and some trade school while their friends are racking of thousands of debt to start out as a barrister or waiter. Insane.
I think you meant a barista.
A barrister is a lawyer.
Some baristas have law degree.
Or uber driver
Well correlated with (low) #s of pavement apes in said towns. I bet (((Soros))) is on the phone right now looking to bus in as many as he can. Must. destroy. civilization!
He has lots of willing accomplices.
“Best college towns.”
Alma mater, CalPoly… guessed it before hitting, Ctrl + End.
Herndon, VA Housing Prices Crater 5% YoY
http://www.movoto.com/va/20170/market-trends/
Oh dear…
Bitcoin
Bitcoin drops by $100 as China’s central bank corrals the market
Luke Graham
4 Hours Ago
CNBC.com
Chinese bitcoin exchanges have disabled withdrawals of the cryptocurrency after meeting with the People’s Bank of China, indicating the central bank has stepped up its efforts to regulate the market.
…
More significant than a 10% drop in terms of USD is the instantaneous 30% drop in the Yuan market. Now the Chinese will have a hard time getting their money out of the country to where it can be spent in $$. They can only convert to Yuan, which just might go free fall itself. Over-invoicing has been clamped down upon as has buying NYC overpriced condos. How are the rats going to get off the ship now?
I know Dan, China is going to become amazingly rich. Hugely rich. Why aren’t the denizens more confident?
Common sense to try to diversify your holding outside the country when you have a government that could go back to being hardcore communist at any time. Does not say anything about the future if China stays on the same path as it is now.
And what path is that, AB Dan? Pray tell….
I’ll help. The road is called Squander.
Measure S quote from one of the banners on this site
“A city is only full when it chooses to be, and bad luck to anyone who doesn’t already own property when that choice is made.”
Town spared after 9 yrs of talking about it!
http://www.newtimesslo.com/breaking-news/14984/walmart-no-more-retail-giant-cancels-plans-for-atascadero-store/
Wally smells a recession and tariffs.
https://www.nytimes.com/2017/02/09/upshot/a-secret-of-many-urban-20-somethings-their-parents-help-with-the-rent.html?_r=0
Parents distorting the market to get their kids out of the basement…
I posted this article the other day.
Lurkers and newbs, understand that there is no “pent-up demand” for $500,000 starter homes.
Not today, not tomorrow, not ever. EVER.
As Yellen the Felon pushes us into Weimar 2.0 with her deranged money printing, it is highly likely that starter homes for 500,000 will be the norm. Of course a can of beans will probably cost $10.
wall streets wants to unload some overpriced sh@t to you.
According to these numbers the place to buy a house might be Russia. Meanwhile, what is going on in Mexico? Talk about debt donkeys, China’s debt is going up rapidly but so is its income, not true in Mexico :
http://www.imf.org/external/research/housing/
ABQ - what is with Intel bailing on ABQ for Chandler? Real estate in ABQ is in a free-fall.
Intel has had an operation for chandler for years. I use to drive by it everyday.
Are they selling any chips?
I havent bought any tech stuff in years. Nothing new or exciting.
Intel investing $7 billion in Chandler facility, creating 3,000 high-wage jobs 2/8/2017
the place to buy a house might be Russia.
Just don’t forget, that if you don’t live in Russia at least 6 months during a year when you sell it, the “income” tax will cost you 30% of the value of the house. That’s 30% of the sale price, not your profit.
Lets illustrate: you buy a place for $1 million, own it for a few years, then the ruble tanks and your house is now worth $500,000, and you decide to eat the loss and sell - you’ll owe the tax man $150,000, in addition to your $500,000 capital loss.
That rule applies to all, including native residents who always permanently live there. Even if they sell their only residence to buy another (an even exchange in the same year), but temporarily (for studying, for example) have a 6 months trip abroad - oops, they are screwed and owe the tax man 30% of the total sale.
If that doesn’t faze you, and if you’re prepared to pay with a boatload of cash (i.e., with actual cash bills, even if you obtain a mortgage, LOL); and if you are not concerned that you’ll be robbed during transfer, or that cash will disappear from the bank vault before the documents registration is complete (count on 2-4 weeks of a nail-biting wait); and if you are not afraid that the place you buy will be taken from you, even after many years of ownership, due to prior claims or problems with the title (title insurance doesn’t work there, problems with title are multiple and untraceable, and the buyers are not protected); etc., etc… then sure, by all means, buy a house in Russia.
It’s an awesome investment, especially for starry-eyed foreigners who read and believe RT.
An imbalance between rich and poor is the oldest and most fatal ailment of all Republics.
- Plutarch (46 – 119)
According to this noted philosopher, nearly 2,000 years ago it was already old news that the fastest way to kill an economy was to let the rich people hoard all the wealth. And what have we learned in 2,000 years?
http://www.zerohedge.com/news/2017-02-10/west-will-become-new-%E2%80%98third-world%E2%80%99-pricewaterhousecoopers
Yep, it’s almost all been ruined. Ruined. Almost all of it. I was just having this discussion with a buddy of mine about what’s happened. When I wuz a pup, the family spent part of a summer with some friends in Acapulco. Beautiful, for the most part, although there were some bad areas that you’d want to stay away from. Now, they kick severed heads down the main streets in broad daylight.
You can’t go to Venezuela. Chile’s OK, I guess, if you don’t mind waiting around for sudden earthquakes. Brazil? Ugh. About the only places in SA I’d be interested in are Uruguay or Colombia, that’s it. Always wanted to go to Greece and see the islands. Wouldn’t go near it now, nor Italy, nor most of Western Europe or even Scandinavia. Maybe parts of Eastern Europe would be OK, seems like. China? LOL, I wanna breathe and drink decent water. Japan too much radiation exposure. Forget India. The ME is an abattoir. Australia? Too hot, weird weather. Like unbearable, is what I’m hearing. After the exposure given to Canada here on the blog, yech. The masters of the universe think they’re so smart effing off to NZ. Really? They’ll kill it off, if they don’t get their underground bunkers wiped out by earthquakes.
When I narrow it down, there’s not many places outside the US that appeal to me. Colombia, Uruguay and parts of Eastern Europe. That’s it. Depressing.
And it ain’t so great in many parts of this country, either, due to globalization. Globalism ruined the globe. Almost all of it.
Wasn’t that the idea of Globalism, to gut the Globe?
You are in FL, right?
Any other place should be an upgrade to that dump.
Cupertino, CA Rental Rates Crater 8% YoY
http://www.zillow.com/cupertino-ca/home-values/
‘Canadian housing just won’t quit’: Homebuilding picks up in January, especially in Ontario cities
Craig Wong, The Canadian Press
OTTAWA — The pace of housing starts across Canada picked up in January compared with December, fuelled by multi-unit projects such as condominiums and apartments.
The seasonally adjusted annual rate of housing starts was 207,408 units in January, up from 206,305 in December, Canada Mortgage and Housing Corp. reported Wednesday.
“Canadian housing just won’t quit,” wrote Nick Exarhos of CIBC Economics in a note this morning. “Although we see a slowdown later on in 2017, permit figures suggest that we could be in store for a few more strong readings yet.”
http://business.financialpost.com/personal-finance/mortgages-real-estate/canadian-housing-just-wont-quit-homebuilding-picks-up-in-january-especially-in-ontario-cities
Oil and commodities don’t matter?
Time to renovate those guillotines.
Or something.
I’m thinking now would be a great time for a company that makes mobile, modular guillotines to roll out a new product line and go public in time for the Mother of All Crashes that’s coming up.
Home listing inventory in AZ is starting to climb. Gilbert AZ MLS shows 9.4% inventory increase listed in last 2 days.
Ha-ha, that’s quite an increase in two days. He who panics first panics best.
Glitch in MLS website?
Sarasota, FL Housing Prices Crater 6% YoY>b>
http://www.movoto.com/sarasota-fl/market-trends/
http://www.latimes.com/business/la-fi-garlic-labor-shortage-20170207-story.html
Aside from picking all kinds of berries and other things growing up, I picked garlic one year. F that! Of all the things I picked, garlic was the worst with walnuts a close second. I still think back on that garlic experience and how much I hated it (and the field boss) every time I see a clove. I can still hear how she squeaked out the word ‘garlic’ with her accent. Thanks for the memories, absolutebeginner! I’ll be imitating her the rest of the day.
This was in Russia before I became an undercover KGB plant posing as a realtor in the states, of course.
This was in Russia before I became an undercover KGB plant posing as a realtor in the states, of course.